Teenagers working in multiple jobs across a range of industries with several superannuation fund accounts have an added incentive to track down their money and consolidate it into one fund.

The government announced in its Mid-Year Economic and Fiscal Outlook that, from the start of 2013, super funds with balances of less than $2000 that had not received contributions for a year had to transfer the money to the Australian Taxation Office.

While any of the estimated $17 billion in lost super collected in this way by the ATO can be recovered by the rightful owners, with interest, there are advantages for anyone with money spread across several accounts to get in first and consolidate their accounts into the fund of their choice.

As well as saving on fees, knowing where the money is might help to encourage teenagers or young adults to take an active interest in retirement savings at some point.

Fees matter, because on low account balances they can quickly eat away at the initially small contributions being made. But it is where the money is invested that can make the biggest difference to the final account balance.

Anyone joining the workforce for the first time should take an interest in selecting their initial fund, or try to gain an understanding of super funds chosen by employers.

Retirement might seem like light years away to 15-year-old workers, but that is no reason to ignore the benefits of preserving as much money as they can along the way.

The three main fund types – industry, retail and corporate – differ mainly in the way they charge members and the investment choices on offer.

Most super funds charge a member fee or management fee, an administration fee and an investment fee. Other costs might include insurance and switching fees for any members choosing to switch between investment options.

By law, super funds can’t deduct annual administration fees in excess of the investment earnings for that year.

Funds have in place what they call member protection, for which they charge a small fee. This works particularly well for members with less than $1000 in their account.

Here’s an example. If you have $500 in an account and you earn 10 per cent a year, then you would be owed $50 by the fund.

If the fund then charges you $100 a year to be in it, it must refund you $50 so you are no worse off.

Funds that lose money may charge a nominal administration fee.

Employers are obliged to pay the 9 per cent superannuation guarantee levy – which is rising to 12 per cent by 2019 – to employees aged 18 or over who earn at least $450 a month before tax, no matter how many hours they work.

They must also pay the superannuation guarantee levy for employees younger than 18, where salary or wages paid on full-time work is above $450 a month. Employers are not obliged to pay the levy on earnings for part-time work of less than 30 hours a week, although some do.

A teenager still at school and working part-time might find the payment of super by their employer varies. Weekend work alone may not qualify for the levy, but working longer hours during school holidays could mean employees meet the 30-hour requirement.

Generally an employer will have a default fund into which the levy will be paid, unless employees nominate a preferred fund.

Job type can largely determine employers’ default fund.

The two biggest employment sectors for young people are retail and hospitality, which are catered for by the so-called industry superannuation funds REST (for retail) and HOSTPlus (for hospitality).

According to SuperRatings, both of these funds are among the lowest cost funds with above median five-and 10-year returns, as shown in the table.

Other low-cost industry funds with a history of good returns are First State Super (mostly NSW public sector members); Club Plus Super (NSW club members); AMIST Super (meat industry); Australian Super (across all sectors); Sunsuper (a Queensland-based fund) and HESTA (health care workers).

All these funds are public offer, which means that even if their membership is skewed in a certain direction, anyone can invest in them. Some funds offer benefits relevant to workers in particular industries, such as a variety of insurance options.

Low-cost funds run by major financial institutions include ING Direct’s Living Super, an index option with no fees; BT’s Super for Life (which charges $60 a year plus 0.99 per cent management fee); and AMP’s Flexible Super – Super Easy Balanced (member fee from $80, plus 0.65 per cent management fee). They don’t make the SuperRatings list because they lack the performance history used as the table’s benchmark.

All super funds must offer a level of insurance, which is another area where young people can cut costs.

AustralianSuper head of advice Frank Ceravolo says that life insurance is offered to any Australian Super fund member aged above 15 years for $2.02 a week, unless they opt out.

“Like any discussion around insurance, it comes down to the cost of having it versus not having it. It is a discussion someone might have with a parent and whether if insurance isn’t taken up, what the impact might be on them financially if the child became permanently disabled,” he says.

SuperRatings managing director Jeff Bresnahan says while insurance cover levels are starting to be more relevant to young people, there is an argument for someone in their teens with no debt or dependants to go without it.

“They may be getting slugged $100 to $300 a year in insurance premiums, all of which is dead money. It may be well worth opting out of,” he says.

Bresnahan says fund members should also take note of where their money is invested, particularly given the long investment time frame.

He says the majority of funds get “plugged into” a balanced option – where 60 per cent of assets are in growth assets such as shares or property and 40 per cent in defensive assets like cash – when they should be in the growth option, with 75 per cent invested in growth assets.

“You are not punting a lot of money so you can be more aggressive and have greater exposure to shares,” he says.

To work out the impact of fees on your superannuation or find lost super go to www.moneysmart.gov.au